The move-down market is really moving across … and it’s keeping its money closer to home.
Homebuyers 55 and over are seeking homes approximately the same size as their present home and, unlike six years ago, they no longer prefer to pay cash. In 2002, 60 percent of builders reported that buyers paid cash while only 23 percent of builders in 2008 described their customers as cash buyers.
Fixed-rate loans dominate a new 55-plus homebuying market study, with adjustable-rate mortgages running neck-and-neck in popularity with reverse mortgages.
Nearly half of the 55-plus respondents (41 percent) prefer a 30-year fixed-rate loan when purchasing a new home, followed by a 15-year fixed-rate loan (38 percent). A small number (5 percent) preferred a reverse mortgage, some type of adjustable-rate loan (5 percent), or an interest-only loan (3 percent).
The downpayment information was part of a new national study conducted by the National Association of Home Builders and MetLife Mature Market Institute, a research subsidiary of MetLife Inc., the huge insurance provider.
The survey, compiled from the responses returned to builders from 1,500 consumers in all regions of the country, was designed to determine what today’s baby boomers and older homebuyers want and how builders can incorporate those desires in new homes. Some of the emphasis was on "green" building, universal design, and energy efficiency.
Nearly half of builders (46 percent) reported that 55-plus homebuyers are buying homes in their communities that are about the same value as their previous home, 31 percent reported buyers are buying homes that are less than the value of their previous home, and 23 percent of builders reported that buyers are buying homes that are more than the value of their previous home.
"The McMansion Revolution is over," said Steven Bomberger, a member of NAHB’s 55-Plus Housing Council. "There’s not as much spending on glamour and glitz. Gone are the heavy marble, big Jacuzzi tubs and built-in wall ovens."
In each of the past six NAHB 55-plus surveys, the size of the home requested by 55-plus buyers continued to be about the size of their previous home. Depending upon where these buyers were from, they wanted homes between 1,600 square feet and 2,400 square feet. This year’s data showed the most popular size at 1,900 square feet — and 79 percent wanted that space on one floor, up from 17 percent in 1970.
"The demand for a single-story home increases as the age of the respondent increases," said David Crowe, NAHB’s chief economist. "Yet those who desire a two-story home still want the master bedroom on the first floor." …CONTINUED